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Office of Governor Pete Ricketts

The Bottom Line

Setting budget priorities is a key responsibility as your Governor.  The upcoming legislative session will require tough choices to address a revenue gap which has grown in recent months.  In Midwestern states, lower prices for our major ag commodities like corn and beef have resulted in a downturn in tax revenue.

When Nebraska families face tough financial times, they reduce their spending.  Government should be no different.  In my last budget, the Legislature and I reduced the rate of growth in state spending by almost half from 6.5 percent to 3.6 percent.  Instituting restraint over the last two sessions was the right thing to do, and it laid the foundation for balancing this next budget with reductions in spending. 

While cutting back during tough budget times is a common sense step for Nebraska families and business owners, the State Capitol is full of various groups and special interests opposed to budget cuts.  Already, senators and their staff are being lobbied to raise taxes instead of cutting government spending.  Rolling back previous tax reductions, raiding the property tax credit relief fund, and raising the sales tax rate are just a few of the proposals being pushed by special interests.  All of these proposals would be bad for Nebraska families and businesses and bad for our economy.

When the Legislature returns in January, I will take a different approach by recommending the Legislature make immediate reductions to close the state’s budget gap in the current year.  Additionally, I will propose a new two-year budget that continues to rein in the growth of government without a tax increase.

Three principles must guide our next budget.  First, the budget must be balanced.  Second, the revenue gap must be addressed without tax increases.  Third, the budget must reduce government spending. 

State law requires Nebraska to balance our state budget.  To achieve this, my administration has taken proactive steps to begin reducing state spending.  At my direction, state agencies instituted a hiring freeze for non-mission critical positions and a ban on non-essential out-of-state travel.  We reduced the amount of money state agencies receive quarterly in preparation for the needed spending reductions to the current budget.

In preparation for the next state budget, state agencies identified ways to cut back.  Agency directors proposed targeted reductions, and I have been combing through the proposals with my budget office as we prepare the budget I recommend to the Legislature.

As we work to reduce spending, we are also developing legislative initiatives to reduce spending and identifying tax reforms that fit in a flat budget.  The only way to have sustainable tax relief is to control spending.  Any opportunity for tax relief is fundamentally the difference between spending restraint and revenue.  Our need to grow the economy will also sharpen our focus to reduce unnecessary regulations and ensure economic incentive programs create good-paying jobs all across Nebraska.

As your Governor, my focus is on representing Nebraska families and their interests in state government.  This year, I hosted over 30 town halls across the state, and everywhere I travel Nebraskans tell me our taxes are too high.

This reality is reflected in national rankings.  USA today ranks Nebraska 5th in the 10 worst states for property taxes while the Fiscal Times ranks Nebraska 7th highest for property taxes.  According to Bloomberg, Nebraska ranks 16th highest for income taxes.  High taxes are a major barrier to growing our state.  I oppose tax increases and will continue to do everything I can to pave the way for future tax relief by reducing state spending.

I hope you will contact your state senator before January to express opposition to tax increases and support for spending restraint.  You can find contact information for your senator at www.NebraskaLegislature.gov.  Please also share your ideas with my office at pete.ricketts@nebraska.gov or 402-471-2244.  In Nebraska, the people are the second house, and I value your input.